Engineering News

PQ Corp for sale, could fetch $1 billion--sources
Thu Apr 19, 2007 4:12pm ET

NEW YORK, April 19 (Reuters) - Specialty chemicals business PQ Corp. has been put up for sale by its private equity backers, two sources familiar with the situation told Reuters and could fetch as much as $1 billion.

The Berwyn, Pennsylvania, company is owned by CCMP Capital Advisors, a private equity firm that was formerly part of J.P. Morgan Chase & Co.'s private equity business, which bought PQ from the founding Elkinton family in a deal announced in December of 2004.

Two sources familiar with the situation said the company was up for sale and one of the sources said it could fetch more than $1 billion and could go to a private equity buyer.

But an industry source said the company would probably be sold for less than $1 billion, based on its earnings before interest, taxes and depreciation.

The price the private equity buyers originally paid for PQ was undisclosed, although a report at the time in The Deal publication put the price at $700 million, or seven times earnings before interest, taxes and depreciation.

CCMP declined comment.

Kevin Doran, vice president of human resources and communications at PQ Corp. said: "We have not made any public comments about any such activity."

Demand for chemical companies has been high among both private equity firms and competitors as the industry consolidates.

Specialty chemicals in particular have done well. In February, Lyondell Chemical Co. agreed to sell its titanium dioxide business to Saudi Arabia's National Industrialization Co. <2060.SE> for about $1.2 billion, a higher price than expected.

PQ Corp. said in a news release on its Web site in March that net sales for 2006 were $708.6 million, up 12 percent from the previous year, while adjusted earnings before interest, taxes and depreciation were $149.1 million for 2006, up 27 percent.

Source: Reuters

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